Institutional framework,corporate ownership structure,and R&D investment: an international analysis

We combine agency theory with the law and finance approach to analyze how the legal protection of investors and the corporate ownership structure affect corporate investment in research and development (R&D). We use information from 956 firms from the five most R&D-intensive industries in 19 developed countries. Our results show that better protection of investors’ rights by the institutional environment has a positive influence on corporate R&D. We also find that corporate ownership concentration works as a substitute for legal protection. This finding means that R&D investment of the firms in the countries with poor legal protection increases as ownership becomes more concentrated. Our results also show that the identity of shareholders has a relevant effect: Whereas banks and nonfinancial institutions as shareholders result in lower R&D, institutional investors as shareholders increase corporate investment in R&D.     

European equity markets volatility spillover: Destabilizing energy risk is the new normal

While energy risk is increasingly recognized as a systemic risk, there is limited comprehensive analysis of the risk propagation in regional contexts. In this study, we examine oil and natural gas price changes and shocks in relation to equity market returns and volatility for 24 European Economic Area (EEA) countries. In addition to traditional panel regressions, we also deploy the Diebold-Yilmaz (2014) spillover index for a closed network analysis. We differentiate in the cross-section across the core EU block, PIIGS countries, EU enlargement countries joining after 2004, and other non-EU countries, to provide insights into the ongoing debates on the European energy market stability. While we find evidence of the manifestation of energy risk throughout the sample period, we find that until 2019 the primary sources of volatility spillover in the EEA economic network arose from economic or political uncertainty. Energy risks, measured by large crude oil and natural gas price shocks also significantly contributed to equity market volatility, with increasing volatility risk arising from natural gas, a green labelled energy source after 2019. Last, we show that CEEC equity markets are more sensitive to oil and natural gas price shocks when domestic currencies depreciate against the Euro.     

The wealth effects of takeover bids regulation in the European Union

We investigate the wealth effects of the Takeover Bids Directive, enacted by the European Union (EU), on mergers and acquisitions. The directive aims at protecting target minority shareholders by restricting antitakeovers provisions and preventing managerial entrenchment. We test the regulation impact using a treatment sample of EU public acquisitions and a control sample from outside the EU. Our results suggest diverse effects of the regulation across treatment countries: acquirers from countries with better shareholder protection engage in more value-enhancing acquisitions postregulation that could otherwise be too costly. The regulation also increases the likelihood of firms becoming targets and raises market value.     

Ambiguity and risk factors in bank stocks

The determinants of banks' cost of equity are not well understood. We depart from prior work assuming rational expectations and instead explore the impact of Knightian uncertainty or ambiguity on bank stocks. We test a large set of asset pricing models and find that investors' lack of confidence in both the drift and correlation structure driving bank stock returns affects banks' cost of capital. We also investigate the economic relation among ambiguity, market liquidity, and banks' capital shortfall, which reveals the transmission channels through which ambiguity may increase the probability of a systemic crisis. Our findings have implications for macroprudential policy.     

The socioeconomic feasibility of greening rail stations: a case study in lisbon

Green roofs and living walls are considered effective solutions for improving the environmental integrity of urbanized areas and the overall performance of buildings. Proposals are emerging not just for buildings but also for existing transport infrastructures that have needs/problems that can be met or addressed by such solutions. However, the economic feasibility of such sustainable solutions has not yet been clarified. This study presents a methodological approach to performing cost–benefit analyses of greening urban transport infrastructures at the separate financial, economic, and socioenvironmental levels. Infrastructure, user, and environmental dimensions are also assessed. Whole life cycle costs and socioenvironmental benefits are considered together. The methodology is applied to one of the main stations in Lisbon, Portugal: Entrecampos Railway Station. Five different case study alternatives for the station’s retrofit with green infrastructures are compared to its current situation. The cost–benefit analysis demonstrated that all five greening alternatives are economically feasible. For a 50-year life cycle and a 3.36% discount rate, the net present value ranged between EUR 734,700 and EUR 7,733,279. A sensitivity analysis was also performed, revealing a high degree of influence of discount and inflation rates, recreation, aesthetics improvement, well-being, and the station noise reduction on the net present value, ranging from 1.5 to 9%.     

Physics competition to inspire learning and improve soft skills: a case of the Chain Experiment

International Journal of Technology and Design Education - The Chain Experiment competition has been held successfully for 6 years in Poland and is attracting growing interest. The...     

Linder Revisited: Trade and Development in the Spanish Economy

The literature has tended to treat Linder’s hypothesis with excessive simplicity given the absence of any formalization for this intuitive theory on trade potential in manufacturers, closely related to the intra‐industry trade paradigm. Against this background, in this paper we first propose a complete empirical model of bilateral trade containing all the determinants suggested by Linder, with special emphasis being placed on non‐homothetic preferences, national income distribution, international economic convergence and geographic distance. We then test the model in an appropriate case, namely that of Spain during the period of its economic transition running from approximately 1959 to 1986. This period was characterized by increasing openness and structural change, as well as by convergence until that country’s integration into the then European Economic Community. The results confirm the importance of the characteristics of internal demand, essentially of income distribution and non‐homothetic preferences. We find that trade horizons delimited by bilateral proximity in development and geographical distance, together with multilateral convergence in economic development are the main indicators for selecting trade partners as markets and suppliers, thereby reinforcing the idea that foreign markets can be considered as an extension of the national market.     

Weighted approval voting

To allow society to treat unequal alternatives distinctly we propose a natural extension of Approval Voting by relaxing the assumption of neutrality. According to this extension, every alternative receives ex-ante a strictly positive and finite weight. These weights may differ across alternatives. Given the voting decisions of every individual (individuals are allowed to vote for, or approve of, as many alternatives as they wish to), society elects the alternative for which the product of total number of votes times exogenous weight is maximal. If the product is maximal for more than one alternative, a pre-specified tie-breaking rule is applied. Our main result is an axiomatic characterization of this family of voting procedures.      

Don't ask me where I'm from: thoughts of immigrants to Catalonia on social integration and cultural capital

Once you get here, you realize that thinking Foucault was writing for you was terribly na?ve, since in reality I did not exist as a subject for anyone like Foucault, or if I did it was only as an object of study’, recalls one of the protagonists in this essay, a collage of fragments of interviews with foreign immigrants from impoverished countries who have settled in Barcelona and other Catalan towns in recent years. Widespread prejudice in the host society dictates that these people are generalized as being on a lower cultural level, anonymous members of the growing mass of immigrants prepared to work at any price. The prejudice seems to be confirmed by the fact that the great majority of them do low-skilled or unskilled work in sectors such as the building trade, hotels and restaurants and domestic service. The reality, however, is very different. The average level of formal education of these immigrants is similar to that of the host population. It is the precariousness of their legal status or the often insurmountable barriers preventing recognition of their academic and/or professional qualifications, or simply cultural prejudice, that condemn them to accept jobs well below their personal potential. Thus, the host society wastes social and cultural capital of the first order, and lays foundations for a permanent division between ‘us’ and ‘them’. This essay offers a modest but revealing sample of the quality and diversity of the ideas and viewpoints of the immigrants themselves, an asset we continue to at best underestimate or more often ignore altogether.